Taiwan’s central bank said on Jan. 16 that Chinese yuan-denominated remittances from Taiwanese banks at the end of December last year rose about 44% from a month earlier, amid warming business ties across the Taiwan Strait.
Quoting its latest statistics, the central bank said that the Chinese yuan remittances through Taiwanese domestic banking units and offshore banking units totaled US$51.46 billion at the end of last December, which was up 44.18% from the end of last November.
In addition to an increase in business exchanges, analysts said that the launch of the Shanghai-Hong Kong Stock Connect trading platform in last November also sped up the pace for local investors to move funds denominated in the Chinese yuan overseas in order to buy stocks in Shanghai. The stock link is a mechanism through which foreign investors are able to trade Chinese A-shares in Hong Kong, and investors in Shanghai can trade Hong Kong shares in China.
The Chinese yuan remittances through local banks’ domestic banking units at the end of last December rose US$9.7 billion from a month earlier to US$25 billion, while the Chinese yuan remittances through local banks’ offshore banking units reached US$15.2 billion, up US$2.47 billion from a month ago, central bank’s statistics showed.
The central bank said that the balance of Chinese yuan-denominated deposits taken by Taiwanese banks at the end of last December reached US$37.78 billion, up about 0.55% from the end of last November. It was the third month that Taiwanese banks witnessed their Chinese yuan deposits growing less than 1% month-on-month.
Analysts said that the reduced interest in the Chinese currency reflected expectations of a stronger U.S. dollar, which led investors to the greenback. The slower growth was also attributed to banks failing to come up with new promotion campaigns to lure funds to Chinese yuan savings accounts.
Chinese yuan deposits taken by Taiwanese banks’ offshore banking units at the end of last December totaled US$30.88 billion, up US$58 million from a month earlier, while Chinese yuan deposits received by local banks’ offshore banking units rose about US$150 million from a month earlier to US$6.9 billion.